Equal Pay Act Means Changes for Job Postings, Hiring Process
Employers still have time to speak up on proposed rules and tweak hiring process to avoid salary history questions

by Jessica Folker
Downtown Denver

Colorado’s Equal Pay for Equal Work Act takes effect Jan. 1, bringing new requirements for job postings and hiring in the state.

The Colorado Department of Labor and Employment last month published a set of proposed Equal Pay Transparency Rules to be discussed at a public hearing Monday. According to employment lawyers, the scope and content of some of the proposed rules are raising a variety of questions among clients. But the language is not set in stone, and employers can submit comments to the CDLE until Thursday.

JOB POSTINGS

The proposed rules spell out requirements for posting jobs and promotional opportunities under EPEWA, which requires employers to disclose salary or hourly pay ranges for each job, along with a “general description of all of the benefits and other compensation” to be offered. Under the proposed rules, these benefits include health care and retirement benefits, paid time off and vacation days, sick leave, parental leave and any other benefits that must be reported for federal tax purposes.

Under the proposed rules, the posted compensation range can extend from the lowest to the highest pay “the employer in good faith believes it might pay for the particular job,” and the employer may “ultimately pay more or less than the posted range, if the posted range was the employer’s good-faith and reasonable estimate” at the time of posting.

Laura Mitchell, principal at Jackson Lewis, expects employers to have questions about the breadth and level of detail they need to provide to be compliant. Jobs that pay based on commission could create extra confusion aboutthe acceptable compensation range.

Fisher Phillips associate LaLonnie Gray said clients are already asking about salary ranges, and some want clarity on how nationwide employers should determine salary ranges in job postings if compensation for a given position varies depending on location.

PROMOTIONAL OPPORTUNITIES

EPEWA also requires employers to make “reasonable efforts” to announce, post or “otherwise make known” opportunities for promotion to all current employees. The new law also mandates that notice be given to all employees on the same calendar day and prior to making a promotion decision. The proposed rules specify that this notice must be given in writing and include the job title, compensation and benefits and provide information about how employees can apply for the position.

To comply under the proposed rules, employers must use their “regular and customary method of communication with employees,” and use an “effective alternative method” to notify employees who can’t be reached by the regular method. If an employer chooses to post promotional opportunities rather than notifying each employee, the posting must be displayed “in an establishment where employees work” or in a conspicuous location where it can easily be seen by workers, such as a break room, employee bulletin board or next to entrances or time clocks.

These proposed requirements, given the degree of clarity they exhibit, also create some ambiguity. “The rules still don’t define what a ‘promotional opportunity’ is,” said Steven Suflas, senior counsel at Ballard Spahr. “You can imagine that there could be disagreement as to whether something is a promotion or a lateral transfer.”

Additionally, the proposed rules require employers to notify all employees of all promotional opportunities. They may not limit the notice to employees deemed qualified for the position. Employers may state that applications are open only to those with certain qualifications.

“So, if you’re looking for a new chief financial officer, everybody in the environmental services department is supposed to get notification,” Suflas said. “That doesn’t seem to make a whole lot of practical sense.”

OVERREACHING?

The most controversial of the proposed rules, according to attorneys, are the rules that address Colorado employers that are offering remote positions or who have employees in multiple states. The broad scope of these proposed rules raises both practical questions for employers in multiple states and legal questions about whether the CDLE can impose such requirements for nationwide employers.

The proposed rules state that a Colorado employer — that is, an employer with at least one employee in Colorado — offering a job to be performed in the state “must notify employees in any state for whom the job would be a promotion” if the employer is accepting out-of-state applicants.

Colorado employers offering a remote job that can be performed anywhere would have to notify all Colorado employees for whom the job would be a promotion, and if the employer posts the job in Colorado or via electronic means accessible in the state, such as a website, they must include compensation and benefits in the posting.

Finally, if a Colorado employer offers a job to be performed outside of Colorado and accepts applicants “from locales at least as distant as Colorado” to the job location, the proposed rules would require the employer to notify all Colorado employees for whom the position would be a promotion and to include compensation and benefits when posting the notice in Colorado or on a website accessible in Colorado.

For example, the rule appears to require a New York-based company with employees in Colorado to let those Colorado employees know of promotional opportunities in Atlanta if the company would also consider applicants from somewhere at least as far away as Colorado, such as California. And if the company’s way of letting employees know about promotional opportunities is typically a website or other electronic platform, they would need to include the salary and benefits information as required under Colorado law.

“That’s one of the most convoluted rules I’ve seen in quite some time, primarily because of all of the caveats to it,” Mitchell said.

“This law seems to say if you’re a nationwide employer, you have to put your salary ranges on all of your job postings, which, for some, seems like an overreach of Colorado state law,” she said. “So I think that’s one of the questions that folks are really hoping that they get some clarification on as these rules get finalized.”

The rule could also create a headache for the CLDE. “From the government standpoint, how do you enforce?” Suflas said. “How do you know if a posting has been put up in Des Moines or Birmingham or Tuscaloosa?”

“The legal question is: Does the jurisdiction of the Colorado Department of Labor legitimately extend to all these other states?” Suflas added.

Employers with concerns about the proposed rules still have time to let the CDLE know their stance. The public comment period ends Nov. 5 and the deadline for adopting the rules is Nov. 10.

Suflas predicted there will be some changes to the rules after the business community offers input. “From an administrative standpoint, I think the department wants to promulgate rules that they can realistically enforce,” he said. “It’s not worth wasting their time coming up with ideas that just aren’t going to work.”

“I think we can expect some modifications, so everybody on the management side should keep their eyes open for that,” Suflas added.

SALARY HISTORY BAN

While not addressed in the proposed pay transparency rules, Colorado’s salary history ban is another EPEWA requirement employers will want to prepare for before January. EPEWA prohibits employers from asking about or seeking an applicant’s salary history.

Gray recommended that employers review their hiring policies and procedures, update any job postings and job applications to remove requests for salary history, and train employees to refrain from asking about prior salary during job interviews. She noted that the ban applies to all employers and all positions.

Some employers with operations in multiple states might have a head start on complying with the ban. “What we’re finding is that clients that have employees in multiple states either have already implemented requirements for removing any questions related to salary history or for training employees to not ask for an applicant’s salary history,” Gray said.

If finalized, the rules will take effect in January.